WASHINGTON, April 3 /PRNewswire/ -- Today, in testimony before the U.S.
Senate Judiciary Committee, Napster Interim CEO Hank Barry called on Congress
to enact a industry-wide license analogous to radio for the delivery of music
over the Internet. He urged that such a license should include direct payment
to artists similar to the "writer's share" of public performance payments that
are collected by ASCAP and BMI. Barry stated, "Licensed music should now be
available over the Internet as it is over the radio. I strongly believe such
a change is necessary, an important step for the internet and that it will be
good for artists, listeners and businesses."
Barry noted cogent arguments made by the RIAA in their own quest to obtain
a industry-wide license from the music publishers with regard to Web
streaming. In a petition to the Copyright Office, the RIAA, with regard to
industry-wide music publishing licenses, contended that a industry-wide
license would "avoid the need for individual negotiations on a scale that is
unprecedented in the industry and thus facilitate the launch" of new Internet
services.
Barry's statement as prepared for delivery follows:
Thank you for inviting me to appear before you today. I am glad to be
here representing the more than 60 million members of the Napster community.
As I did last time I was here, I would like to take a moment to acknowledge
Shawn Fanning. He was 19 then -- he is 20 now. Despite his advanced years,
he is not yet over the hill.
The question before us today is what does it take to make music on the
Internet a fair and profitable business. I believe it will take an Act of
Congress -- a change to the laws to provide a industry-wide license for the
transmission of music over the Internet. The Internet needs a simple and
comprehensive solution, similar to the one that allowed radio to succeed --
not another decade of litigation.
I have tried for the last 9 months to make a market based solution. We
were able to reach agreement with Bertelsmann on a business model and license
terms for the sound recordings and the musical compositions they control. Yet
I cannot today report that any other such agreement has been reached with a
major label or publisher.
One obstacle may have been a lack of will -- but all of the record and
publishing companies represented on this panel now say they want to move
forward in this area, and I take them at their word. What, then, is the
problem? Licensed music should now be available over the Internet as it is
over the radio.
A large part of it is complexity. Take this CD by the Holmes Brothers.
It is no simple object. There are two separate and distinct copyrighted works
embodied in each track on this gospel CD.
For each track there is an owner of the sound recording. There is also a
separate work, the musical composition -- the song the artist sings. By law,
each track of the CD is also considered a reproduction of the musical
composition. On this single CD, for example, there are 13 sound recordings
and 8 separate music publishers. And that's pretty typical. Now multiply
that times 3,000 record companies in the US, and 25,000 music publishers,
times 27,000 new CDs per year. Separate individual negotiations for all these
rights are simply not a viable option.
This has led to endless private negotiations and litigation. Let me show
you a John Madden style diagram of the state of litigation among just those of
us on the panel here today.
How can this mess be cleaned up?
Well, this is the center of this matter -- and here I find myself in
surprising agreement with a perceptive recent analysis by the RIAA.
Vivendi-Universal recently made musical compositions available online
without getting the publishers' permission. The RIAA has gone to the
Copyright Office, after the fact, arguing for a industry-wide license for
situations such as this. I quote from their petition:
"The music industry is unique among owners and users of copyrighted works
in that reproduction and distribution of musical works has been subject to a
industry-wide license since 1909.
" ... [x] the availability of a industry-wide license has ensured that
necessary rights can be obtained, when needed, at a known price, and pursuant
to established procedures."
The RIAA then argues that extending the industry-wide license to their new
digital offers would -- and I now quote again -- "avoid the need for
individual negotiations on a scale that is unprecedented in the industry and
thus facilitate the launch" [end quote] of those new services ...
That is the official position of the RIAA -- and I endorse this principle.
But I endorse it not just for musical compositions -- but for sound recordings
as well.
Congress has repeatedly used such licenses to advance public policy goals
in the context of new and frequently inefficient marketplaces. Industry-wide
licenses with clear payment structures have encouraged beneficial new
technologies, and responded effectively to particular market failures.
Music on the radio works because of what is functionally a industry-wide
license. Cable television. Satellite television. Web casting. You in the
Congress have effectively encouraged new technologies through industry-wide
licensing in a way that fostered competition and benefited consumers and
creators alike.
Copyright requires a constant balance between the public's interest in
promoting creative expression and the public's interest in having access to
those works. This is a balance that has often proven impossible to find
without the help of the Congress.
Finally, the Napster community says loudly and clearly that it wants
artists and songwriters to be paid. I think that the license you create
should include a direct Internet rights payment to artists. There is
certainly precedent for this in the so-called "writer's share" of public
performance (radio and television) payments that are collected by ASCAP and
BMI.
As you know, a portion of those payments goes directly to the songwriter.
Senator, this is a moment of tremendous opportunity. For many years, our
nation and this Committee heard wonderful promises of an emerging Internet
music era, where people could have convenient access to the entire catalog of
recorded music over the Internet at the touch of a button.
Well, as often happens, history arrived ahead of time.
And it is a uniquely American story.
A young man with no standing, no credentials, no connections, and no plan
for placating the powerful, sat down outside Boston and created an entirely
new system.
Within 18 months, we were no longer debating whether there would be music
on the Internet, but rather debating the best way to make sure that it
continues. More than 60 million people have started a new stage in our
national love affair with music. All of us are finding new music -- and
music we'd forgotten how much we loved.
The question before this Committee is a matter of policy: how to make this
new world of Internet music work. The next step should not be shutting it
down. The Congress has effectively promoted new technologies in the past,
while ensuring that creators benefit; it is essential that you do so again
today.
Thank you.

SOURCE Napster

WASHINGTON, April 3 /PRNewswire/ -- Today, in testimony before the U.S.
Senate Judiciary Committee, Napster Interim CEO Hank Barry called on Congress
to enact a industry-wide license analogous to radio for the delivery of music
over the Internet. He urged that such a license should include direct payment
to artists similar to the "writer's share" of public performance payments that
are collected by ASCAP and BMI. Barry stated, "Licensed music should now be
available over the Internet as it is over the radio. I strongly believe such
a change is necessary, an important step for the internet and that it will be
good for artists, listeners and businesses."
Barry noted cogent arguments made by the RIAA in their own quest to obtain
a industry-wide license from the music publishers with regard to Web
streaming. In a petition to the Copyright Office, the RIAA, with regard to
industry-wide music publishing licenses, contended that a industry-wide
license would "avoid the need for individual negotiations on a scale that is
unprecedented in the industry and thus facilitate the launch" of new Internet
services.
Barry's statement as prepared for delivery follows:
Thank you for inviting me to appear before you today. I am glad to be
here representing the more than 60 million members of the Napster community.
As I did last time I was here, I would like to take a moment to acknowledge
Shawn Fanning. He was 19 then -- he is 20 now. Despite his advanced years,
he is not yet over the hill.
The question before us today is what does it take to make music on the
Internet a fair and profitable business. I believe it will take an Act of
Congress -- a change to the laws to provide a industry-wide license for the
transmission of music over the Internet. The Internet needs a simple and
comprehensive solution, similar to the one that allowed radio to succeed --
not another decade of litigation.
I have tried for the last 9 months to make a market based solution. We
were able to reach agreement with Bertelsmann on a business model and license
terms for the sound recordings and the musical compositions they control. Yet
I cannot today report that any other such agreement has been reached with a
major label or publisher.
One obstacle may have been a lack of will -- but all of the record and
publishing companies represented on this panel now say they want to move
forward in this area, and I take them at their word. What, then, is the
problem? Licensed music should now be available over the Internet as it is
over the radio.
A large part of it is complexity. Take this CD by the Holmes Brothers.
It is no simple object. There are two separate and distinct copyrighted works
embodied in each track on this gospel CD.
For each track there is an owner of the sound recording. There is also a
separate work, the musical composition -- the song the artist sings. By law,
each track of the CD is also considered a reproduction of the musical
composition. On this single CD, for example, there are 13 sound recordings
and 8 separate music publishers. And that's pretty typical. Now multiply
that times 3,000 record companies in the US, and 25,000 music publishers,
times 27,000 new CDs per year. Separate individual negotiations for all these
rights are simply not a viable option.
This has led to endless private negotiations and litigation. Let me show
you a John Madden style diagram of the state of litigation among just those of
us on the panel here today.
How can this mess be cleaned up?
Well, this is the center of this matter -- and here I find myself in
surprising agreement with a perceptive recent analysis by the RIAA.
Vivendi-Universal recently made musical compositions available online
without getting the publishers' permission. The RIAA has gone to the
Copyright Office, after the fact, arguing for a industry-wide license for
situations such as this. I quote from their petition:
"The music industry is unique among owners and users of copyrighted works
in that reproduction and distribution of musical works has been subject to a
industry-wide license since 1909.
" ... [x] the availability of a industry-wide license has ensured that
necessary rights can be obtained, when needed, at a known price, and pursuant
to established procedures."
The RIAA then argues that extending the industry-wide license to their new
digital offers would -- and I now quote again -- "avoid the need for
individual negotiations on a scale that is unprecedented in the industry and
thus facilitate the launch" [end quote] of those new services ...
That is the official position of the RIAA -- and I endorse this principle.
But I endorse it not just for musical compositions -- but for sound recordings
as well.
Congress has repeatedly used such licenses to advance public policy goals
in the context of new and frequently inefficient marketplaces. Industry-wide
licenses with clear payment structures have encouraged beneficial new
technologies, and responded effectively to particular market failures.
Music on the radio works because of what is functionally a industry-wide
license. Cable television. Satellite television. Web casting. You in the
Congress have effectively encouraged new technologies through industry-wide
licensing in a way that fostered competition and benefited consumers and
creators alike.
Copyright requires a constant balance between the public's interest in
promoting creative expression and the public's interest in having access to
those works. This is a balance that has often proven impossible to find
without the help of the Congress.
Finally, the Napster community says loudly and clearly that it wants
artists and songwriters to be paid. I think that the license you create
should include a direct Internet rights payment to artists. There is
certainly precedent for this in the so-called "writer's share" of public
performance (radio and television) payments that are collected by ASCAP and
BMI.
As you know, a portion of those payments goes directly to the songwriter.
Senator, this is a moment of tremendous opportunity. For many years, our
nation and this Committee heard wonderful promises of an emerging Internet
music era, where people could have convenient access to the entire catalog of
recorded music over the Internet at the touch of a button.
Well, as often happens, history arrived ahead of time.
And it is a uniquely American story.
A young man with no standing, no credentials, no connections, and no plan
for placating the powerful, sat down outside Boston and created an entirely
new system.
Within 18 months, we were no longer debating whether there would be music
on the Internet, but rather debating the best way to make sure that it
continues. More than 60 million people have started a new stage in our
national love affair with music. All of us are finding new music -- and
music we'd forgotten how much we loved.
The question before this Committee is a matter of policy: how to make this
new world of Internet music work. The next step should not be shutting it
down. The Congress has effectively promoted new technologies in the past,
while ensuring that creators benefit; it is essential that you do so again
today.
Thank you.
SOURCE Napster